Decline in number of business owners

BUSINESS owners are a dying species, victims of ten years of economic growth, a Productivity Commission report shows.

A staff working paper on "Forms of Work in Australia" concludes business owner numbers have been falling dramatically over the decade to 2011, attracted by the security of permanent employment.

The mining boom has been a big driver in the shift.

While the number of unincorporated business owners has shrunk by 3 per cent over those 10 years, permanent employee numbers have grown 3 per cent.

But the number of business owners in the mining states of Western Australia, Queensland and Northern Territory has shrunk 4.7 per cent compared to the non-mining fall of only 2.4 per cent, according to the paper.

"The fact that increases in the prevalence of permanent employees and declines for OMUEs (owners-managers of unincorporated entities) were much larger in the mining states suggests that changes at a national level (for example, in tax settings, business regulation and superannuation rules) were not the main driver of observed prevalence changes," the report by Anthony Shomos, Erin Turnerand Lou Will says.

More buoyant economic conditions and confidence in the mining states promoted growth in employee numbers, exacerbated by those states coming off a low base, it says.

"The results suggest that workers became less likely to establish unincorporated enterprises (at least as their main source of employment) and more likely to work for someone else, over the decade."

In an election year where both sides are courting small business, the analysis may let both off the hook in terms of blame, laying it squarely at the feet of a healthier economy.

But Independent Contractors Australia executive director Ken Phillips said the Productivity Commission analysis failed to account for a rise in public service numbers as a national influence.

"Also, businesses are still recovering from the global financial crisis and that's putting people out of business left, right and centre," he said.

"And while the Australian Taxation Office gave businesses a break during the GFC, they are now aggressively pursuing debt recovery and superannuation guarantee compliance.

"So there are a few factors they appear to have left out of their analysis."
 

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APN restructures to battle media decline

TROUBLED publisher APN News & Media is restructuring its digital and regional divisions' management as it tries to combat tough times in the newspaper industry.

The company announced that it had replaced its Australian regional media division chief executive Warren Bright with its group operations and procurement director Neil Monaghan.

Chairman Peter Cosgrove said the company still believed there was a future for regional newspapers despite the current tough environment.

"APN believes there is a strong future in regional newspapers to provide local news to local communities and our strategy will be clearly focused on meeting this need for our readers and advertisers," he said.

In its digital operations, the company has simplified the management of its brands Exclusive, GrabOne and CC Media and disbanded its Business Development Office.

"We are committed to our digital ventures and our focus now is to drive the performance of these businesses and link them with our other media assets," Mr Cosgrove said. "We do not intend to make any significant digital investments this year."

APN is also reducing the size of its head office and as part of that process the position of chief development officer, held by Matt Crockett, has been made redundant.

The APN board said the business had been affected by the ongoing structural challenges in the media, mining slowdown, decline of government advertising and, recently, the Queensland floods.

The board said it believed a new direction of leadership was important to build on the company's progress.
APN shares were up 1.75 cents, or five per cent, at 36.75 cents at 2.20pm AEST.

Lonsec private client adviser Michael Heffernan said the market tended to initially look favourably upon restructures at media companies.

"The traditional media stocks are going through troubled waters and restructures tend to be the flavour of the day for them," he said.

"I think the market is looking for changes, and when they do the top management restructure, it gives the market a bit of heart for a little while until they see what the results are."

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